CHANDIGARH: Rising exports to Iran have lifted the price of India's premium rice grade, Pusa-1121, by 11 percent in the past week, and some farmers are holding back stocks expecting a further rise, traders and farmers said. 

The price at the spot market in the Amritsar district, bordering Pakistan, has risen to Rs 2,550 per 100 kg, or about $517 per tonne. 

That is still well below the benchmark Thai rice of $630 a tonne, even thought the Thai price has fallen for the past five weeks. The Pusa-1121 variety was selling at Rs 2,300 rupees per 100 kg a week ago in the spot markets in the northern Punjab and Haryana states, the main producing regions.

"It is mainly due to the growing demand in Iran. We export about 70-80 percent of the produce to Iran directly or indirectly. Lifting of export ban on PUSA 1121 has given a boost prices and trade," Rajeev Setia, president of the Punjab Rice Exporters Association, told Reuters on Wednesday. 

The price may dip slightly but not below 2,400 per 100 kg after farmers bring freshly harvested crops to the market, said Ashok Sethi, a director in the association. 

Farmers say they will sell only when they get an attractive price. 

"I got an offer to sell at around Rs 2,700 per 100 kg two days back. I still thinking whether to sell or not since there may be more increase in rates," said Ramanbir Singh Mansahia, a farmer in Sangrur district of the Punjab state. 

India had banned the export of all non-basmati grades of rice in April, when prices had soared on fears of scarcity, but surging stocks encouraged the government last month to allow exports of the Pusa-1121, which is an aromatic, long-grained variety like basmati.